Do I pay car insurance a month in advance?

Just like monthly rent, you are essentially paying car insurance a month in advance to have coverage for that month. If you pay your premiums annually or bi-annually, then you are paying for coverage six or twelve months in advance. You must pay auto insurance in advance in order for coverage to apply.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2020

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Things to know...

  • Car insurance payments must be submitted in advance of active coverage
  • Monthly payment options are available although annual, bi-annual, and quarterly payments may be better for certain customers
  • Never fall behind on insurance payments or risk cancellation
  • Shop around for better rates if affordability remains a concern

Car insurance requires two parties to enter into a contractual agreement.

  • The policyholder pays a set premium amount to the insurance company. The car insurance company then agrees to pay for losses detailed in the insurance contract.
  • The customer must remain to date with required payments or else a policy can be canceled.

Once canceled, all financial protections are lost including all-important auto liability coverage.

To avoid falling behind on payments, a policyholder may choose to make additional payments beyond the required minimum amount.

Make sure to find the best rate for the car insurance you need. Enter your zip code above to compare quotes right now.

Paying a month in advance sounds like a good plan to avoid falling behind on premiums. Would the insurance company allow the policyholder to make such a payment? And, for that matter, does an insurance company require payments be made one month in advance?

Car Insurance and Upfront Payments


Requirements exist to pay for car insurance in advance.

Insurance premiums involve upfront payments as opposed to paying for past services rendered.

In other words, a customer who pays a monthly insurance premium on February 1 pays for coverage for the month of February. He/she is not paying a bill due for coverage previously provided from January 1 through January 31st.

Now, if someone chooses to pay premiums on a monthly basis, paying extra to cover additional months likely won’t be a problem. The insurance company doubtfully will refuse a double payment for February and March on the February due date.

That said, policyholders should always double-check with their insurance provider when in doubt about any rule. Being diligent and following up to make sure submitted payments cleared further ensures the policyholder knows coverage remains active.

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Grace Periods and Troubling Payment Approaches

Positive news exists for those worried about missing a payment. An insurance policy might come with a grace period. A grace period allows a policyholder a certain amount of time after the due date to submit a payment without penalty.

An insurance company might send out a reminder notice via email or snail mail to remind a customer he/she missed a due date. The notice likely will continue the necessary date in which the late payment must be submitted by.

Not all providers are so generous. A grace period may or may not be afforded depending upon the rules put forth by a specific insurance company. The grace period could even be extremely short.

Never make assumptions about grace periods since, unlike health and life insurance, state law does not always mandate grace periods for auto insurance.

Always confirm the existence of one and its length with the insurance company. Otherwise, being a day late may lead to a cancellation. Chronic lateness could also jeopardize a policy.

If a grace period exists, customers should avoid abusing it. Some may choose to take advantage of a 30-day grace period to cease making payments when due. The intent here is to buy extra time to pay. Doing so reflects a bad idea.

Accounting errors and due date confusion may lead to missing final payment cut off time. Cancellation may result leaving the policyholder in a tough position.

Pay all premiums on time. Follow this rule to avoid a host of calamities. Remember, once an insurance contract ceases to be active, the policyholder may be in violation of criminal law and also responsible for any civil judgments resulting from an accident.

Insurance protections cannot be in place when no active insurance policy exists.

Sometimes, the best strategy would be to just pay the policy off as quickly as possible.

Additional Payment Options


Monthly payment plans can be beneficial to those on tight budgets. Commonly, a down payment is required in order to activate a monthly payment plan. The plan may also come with a small service fee.

The most common payment plans for car insurance are:

  • monthly
  • quarterly
  • semi-annually
  • annually

Comparison shopping may help with finding the best insurance with the best rates including limited fees on monthly plans. Still, a monthly plan offers convenience for the budget conscious.

Choosing a monthly plan option, however, might not always be the best strategy for those with the means to pay more.

Paying the insurance policy off in full — paying for an entire year at once — does eliminate the burden of keeping up with payment due dates. For those unable to pay the entire premium at once, look at the next available options. Pay once every six months or three months instead.

Not every policy, however, runs one full year. Six-month policies are commonplace as these policies allow the insurance company to recalculate risk more efficiently.

Regardless of the insurance term, policyholders should work at paying off any balance due as quickly as possible.

The Option of Credit Card Payments


Auto insurance companies accept credit cards to process payments. Paying off an auto insurance policy with a credit card entails, essentially, taking out a loan. The auto insurance policy may be paid in full and a debt is owed to the credit card company.

The policyholder can then make flexible payments to the credit card company knowing all financial obligations to the insurance provider have been met.

Yes, interest does accumulate on the credit card balance but concerns over missing payments with the insurance provider are eradicated.

The golden rule all insurance customers must follow is “pay on time.” Missing payments and being in arrears may lead to lost coverage.

Anyone struggling to pay insurance premiums should perform comparison shopping to locate lower rates and expanded discounts. Enter your zip code below to compare right now. Upon purchasing a policy, any policy, be sure to make all required payments when due.



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